DISSERTATION REPORT

ON

CRISIS MANAGEMENT COMPARISON OF TWO MANUFACTURING ORGANIZATIONS

SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS OF THE PGD HRM PROGRAM OF

SCHOOL OF MANAGEMENT, GD GOENKA UNIVERSITY, GURGAON

ACADEMIC SESSION

2020-2021

UNDER THE GUIDANCE OF:

DR. PARUL SINHA

SUBMITTED BY:

SHAINA SACHDEVA
ENROLMENT NO: 200010108008

GD GOENKA UNIVERSITY
SOHNA ROAD, GURGAON – 122103, HARYANA, INDIA
 DECLARATION

I, hereby, declare that report titled “ Crisis Management Comparison of two Manufacturing
Organization” submitted to Dr. Praul Sinha is a record of an original work done by me under his/her
guidance. This project work is submitted in the partial fulfilment of the requirement for award of
post graduate degree in masters of business administration. The result embodied in this project has
not been submitted to any other institute for the award of any degree/diploma.

Signature of the student: SHAINASACHDEVA

Name of Student: Shaina Sachdeva

Enrolment Number: 200010108008

Dated: 27/04/21
 CERTIFICATE FROM GUIDE

This is to certify that Dissertation Work titled Crisis Management Comparison of two Manufacturing
Organization is a bonafide work carried out by Shaina Sachdeva 200010108008 student of PGDs
(2020-21) of School of Management, GD Goenka University, Gurgaon under my guidance and
direction.

Signature of Guide :

Name and Designation :

Date :

Place :
 ACKNOWLEDGMENT

First and foremost, praise and thanks to the God, the Almighty, for his showers of blessing
throughout my research work to complete the research successfully
I would like to express my deep and sincere gratitude to my research supervisor Dr. Parul Sinha,
Professor G.D. Goenka University School of Management, Sohna Road, Gurugram, for giving me
the opportunity to do research and providing invaluable guidance throughout this research. Her
dynamism vision, sincerity and motivation have deeply inspired me. She has taught me the
methodology to carry out the research and to present the research works as clearly as possible. It was
a great privilege and honour to work and study under her guidance.
I am extremely grateful she has offered me. I would also like to thank her for her friendship,
empathy, and great sense of humour. I am extending my heartfelt thanks to her family for their
acceptance and patience during the discussion I had with her on the search work and thesis
preparation.
I am extremely grateful to my parents for the love, prayers, caring and sacrifices for educating
and preparing me for my future. I am very thankful for my family for the love, understanding, praise
and continuing support to complete this research work. Also I express my thanks to my brother for
his support and valuable prayers.
 ABSTRACT

In today’s society, crisis are phenomenon that every organisation has to be prepared for.
There are/is great variety of crisis, and the study examines how different types of crisis can be
described. In this constantly changing volatile world it has become absolutely necessary that every
organisation has a crisis management strategy or at least a contingency plan ready for a crisis arise.
The following research deals with how prepared and ready two manufacturing organisations are in
terms of their crisis management strategies. Three objectives are being focused upon in this study: To
Study the Crisis Management Plans and Readiness of Boston Scientific; To Study the Crisis
Management Plans and Readiness of Gao Tek.Inc. ; To Compare the crisis Management Plans and
Readiness of the both organisations. The research utilizes a quantitative method to collect data. A
questionnaire survey consisting of 6 questions was administered to 20 employees each from both the
organisations.
The results show that 1) the organisations either do not have a crisis management plan 2) not
all the employees are aware of the plan. From the results it can be concluded that it is very important
that the organisations convey their crisis management plan/strategies to every department clearly to
help them be well prepared in advance.
 TABLE OF CONTENT

Declaration From Student

Certificate From Guide
Abstract/ Executive Summary

CHAPTERS PARTICULARAS PAGE. No.

1 Introduction 7
1.1 Background 7

2 Review Of Literature 10
2.1 Types Of Crisis 10
2.2 Consequences Of Crisis 14
2.3 Crisis Management Plans/Models 16

3 Research Question 20

4 Research Objective 21

5 Research Methodology 21

6 Data Analysis 24
6.1 Gao Tek. Inc Response Chart 24
6.2 Boston Scientific Response Chart 27
6.3. Boston Scientific Result Analysis 30
6.4 Gao Tek.Inc Result Analysis 31

7 Findings And Conclusion 32

8 Suggestion And Recommendation 33

9 References 34

10 Appendix 38
 1. INTRODUCTION
This chapter will begin by giving a background of the topic of crisis management, covered in this
dissertation. The background will bring up what a crisis is and how it negatively affects an
organisations functioning and performance. Then a brief about how COVID-19 has impacted the
organisations so far, in terms of their reaction and planning. The problem discussion will describe
the preparedness of two manufacturing organisations for anticipated crisis.

1.1 Background
Crisis can strike in any organisation. It is important to have a detailed plan of action for different
types of crisis that may occur. This plan can make or break the organisation in times of a crisis.
(Pheng, Ho, & Ann, 1997). It is not a question of “if” an organisation will face a crisis, it is a
question of “where” and “when” the crisis will occur. Despite if it is an earthquake, a disaster, a
strike, or a global pandemic. The crisis will hit the organisation with full force. All that matters for
the organisation is how well prepared they are to handle it. (Kash & Darling, 1998) A crisis is a
high consequence low probability action that strikes an organisation, and has the potential power to
threaten the entire business. A crisis endangers the general public sense of values, safety and
correctness (Alas, Gao, & Vanhala, 2010; Hale, 1997; Pearson & Clair 1998).

The word ‘crisis’ originates from the Greek word ‘Krisis’- translated into English it might be
similar to ‘decision’ and ‘choice’ (Paraskevas, 2006). Often there are many solutions to situations
where ‘choice’ and ‘decisions’ are involved. A trade-off between important options often eases the
situation, and strategic plans are often utterly crucial for the originations to possess (Cutlip, Center
& Broom, 2006). In order to erase all room for speculation the medial and rivals have to cause
harm, the process must be very well planned and structured since there is a right and wrong way to
handle a crisis (ibid). for an event or incident to labelled as a crisis, Pearsons and Mitroff (1993)
found that the even has to pose an evident threat to an organisations reputation and viability. A
crisis’ potential to do harm to an organisation’s reputation is reflected in the type of threat (Coombs
& Holladay, 1996).

The definition of crisis today can be formulated along three dimensions according to Hermann
(1963). An organizational crisis (1) challenges the organization's high priority principles, (2)
provides a limited period of time in which a solution may often be made, and (3) is unforeseen or
unanticipated by the organization. In an unfamiliar situation a point of trial and error is present in
seeking an answer. (ibid). Charron posited that crisis situation frequently serve as proving grounds
for paradoxical cooperation-conflict relationship between journalists and public relations
practitioners (Arpan & Pompper, 2003).

According to Michael and Judy Larkin (1997) “ crisis is an event which causes the company to
become the subject of widespread potentially unfavourable, attention from the international and
national media and other groups like customers, shareholders, employees and their families,
politicians, trade unionists and environmental pressure groups who for one reason or another, have
vested interest in the activities of the organisation”

Specifically organisational crisis are believed

1. To be highly ambiguous situation where causes and effects are unknown ( Dutton 1986;
Quarantelli, 1988)
2. To have low probability of occurring but, nevertheless, pose a major threat to the survival of
an organisation ( Jackson and Dutton, 1987; Shrivastava et al., 1988) and to organisational
stakeholders (Shrivastava, 1987)
3. To offer little time to respond ( Quarantelli, 1988)
4. To sometimes surprise organisational members ( Hermann, 1963)
5. To present a dilemma in need of decision or judgement that will result in change for better
or worse (Aguilera, 1990; Slaikeu, 1990).

Image is an essential part to any individual and organisation (Benoit, 1997); despite if they are
governmental, non-profit or commercial (Watson, 2007). A good reputation helps the organisation
to remain competitive and achieve goals, and strengthen their relationship to stakeholders. A
healthy reputation helps create a competitive advantage, by demonstrating major differences from
other organisations. Reputation is often represented by the emotions and knowledge individuals
have towards a range of different products (Hall, 1992). A suggested reputation of corporate
reputation is “a stakeholder’s overall evaluation of a company over time. This evaluation is based
on the stakeholder’s direct experiences with the company, any other form of communication and
symbolism that provides information about the firms actions and/or a comparison with the acts of
other major competitors” (Gotsi & Wilson, 2001).

Ashroft (1977) stated that an organisations reputation, even though it is not mentioned in
financial reports, is simply as important as the other assets possessed by the organisation. Moreover,
Coombs and Hollady (1996) devised the damage to an organisations reputation can presumably be
translated in to substantial financial damage which can threaten the survival of an organisation.
According to Coombs and Holladay the protection of an organisation’s reputation from damage is
achieved through the implementation of crisis response strategies. Williams and Olinarian (2002)
stated that preventing and responding to a crisis represent what strategic planning as part of crisis
management is, with the aim of removing risk and uncertainty. Crisis management is a crucial part
of any organisation and supports the well-being of an organisation the effective management it
entails (Pheng, Ho & Ann, 1997). A part of crisis management is developing a plan that should be a
part of an organisation’s overall strategic management plan (Johnson & Peppas, 2003).

Darling (1994) clarifies that crisis management is not synonymous with mismanagement, i.e.
crisis circumstances that arise as a result of insufficient or improper coordination or lack thereof.
Therefore, as Chong (2004) implied, crisis management is an important component of
contemporary strategic management. It should be of utmost importance to secure an organisations
existence before it can devote its efforts towards growth oriented objectives. The word crisis
management according to Eliasson and Kreuter can differ a lot between countries and even between
organisations (Khodarahmi, 2009). This is due the level of dynamic that exists in different situations
in different parts of the world. Darling (1994) found that crisis management in its essence is
providing organisations with an organised response to crisis situation. An organization will conduct
its daily activities when dealing with a crisis if it has a well-planned crisis response.

Crisis management is described by Kash and Darling (1998) as "a set of functions or processes
for identifying, studying, and forecasting crisis problems”. Crisis management also enables
organisations to cope or prevent a crisis. According to Pollard and Hotho (2006), preparing
scenarios and designing crisis response procedures would provide a major benefit to an
organization. The positive effect from developing a crisis management plan, including improved
communication, stronger corporate networks and employing a wide range of new talents, also
includes better management of other aspects of strategy (Coombs & Holladay, 1996). In order to
influence how stakeholders interpret a crisis, the organisation can use communication.
Communication may be a valuable tool for managers that are handling crisis. The financial damage
that a crisis may bring upon the organisation should influence the communication between the
organisation and their stakeholders. Except from the usual stakeholders, news media also shares an
interest in crisis situation affecting an organisation.

Pearson and Clair (1998) define organisational crisis management as “ a systematic attempt by
organisational members with external stakeholders to avert crisis or to effectively manage those that
do occur”. They further state that “ organisational crisis management effectiveness is evident when
potential crisis are averted or when key stakeholders believe that the success outcomes of short and
long-range impacts of crisis outweigh the failure outcomes”.

Though different experts have defined these terms in different ways, for the purpose of this
research, the definition as given by Laurence Barton (1993) for the term “crisis” is considered as
most appropriate and useful. To repeat the definition “ A crisis is a major unpredictable event that
has potentially negative results. The event and its aftermath may significantly damage an
organisation and its employees, products, services, functional condition and reputation”.

2. LITERATURE REVIEW

2.1 Types of Crises

Crisis can be of many types. Some may come as a surprise to management, whereas others are
part of the standard risks of business operations.

Many experts have carried out studies on the different kinds of crisis. Smith (1963) has
represented seven different kinds of crisis some external, some internal. These are: crisis of growth;
crisis stemming from the abdication of responsibility by the chief executive; crisis arising from loss
of management over operations; crisis arising from components of the organisations flouting the
law; crisis of leadership; crisis of judgement; and crisis precipitated by competition.
His conclusions are:
1. Organisation crisis build up over time. There are several contributing factors to corporate
while one or few may be a lot central than others.
2. The chief executives is usually the main cause of crisis.
3. Environmental changes often triggers corporate crisis.
4. At times chance factors create a crisis.
5. organisation crisis often arise from a inappropriate understanding of management or
organisational ideas like decentralisation, diversification, or control, or from their excessive
or inadequate application, or from a failure to take compensatory actions, such as a more
sophisticated information and control system for senior management following structural
decentralisation.
6. Crisis typically have useful effects by forcing the taking of long outstanding actions.
 7. Crisis may well be headed off by keeping the organisation competitive, reaching out for
opportunities while not going overboard, accurate supervision of the chief executive by the
board of directors and of the company by the chief executives, the ability to discriminate
between ‘real trouble’ from standard operating difficulty, and by management having the
bravery to face the ‘real’ trouble in time.

Lippitt and Scmidt (1967) have recognized developmental crisis, that is crisis attended upon the
expansion of the organisation from birth through youth and maturity. These crisis might
superficially appear external or internal, however actually stem from organisational birth pains and
growing pains. They have matching critical concerns throughout each of these three stages and the
key crisis with respect to each critical concern. For example, during the birth stage, creating a new
organisation and its survival are important concerns and the associated key problems are what risk
to take and what to sacrifice. By means of contrast, within the maturity stage, the critical issues are
how to accomplish novelty and adaptability and how to contribute to society and the critical issues
are whether and how to change and whether and how to share surplus. Lipptt and Schmidt outline
the consequences of the correct versus incorrect resolutions of these issues, the knowledge, skills,
attitudes, key decisions and problems and actions required to deal with each critical concern. As
they have suitably pointed out, completely different sets of behaviour and actions are required for
the crisis associated with the three stages of development.

For example, to stabilise the organisation youth, the actions required are: take more assertive
action in market place; use systematic plans and independent setting; try to beat competition; begin
research and development as appropriate; trail personnel for future needs; begin image building in
and outside organisation. The critical concern of achieving novelty during organisational maturity
requires selection and promotion of one special service or product or product line; larger
decentralisation; provision of more efficient communication; increase in advertising and image
building activity; consideration of optimal size of the organisation. It is a debatable point, however,
whether organisation experience critical concerns in the sequence outlined by Lippitt and Schmidt.
In a dynamic competitive industry, one suspects that all six concerns listed by them may often be
simultaneously critical.

Hamermash’s study (1997) is concerned with internal crisis. He studies the responses of the
corporate management of various organisations to a crisis posed by the poor performance of a
division, the responses also may be relevant to situations in which management is faced with an
internal crisis about which it is not too well informed about the causes, a situation typical of
sizeable organisation, whether divisionalised, functionally departmentalised or organised as a
matrix of temporary teams. Hamermash argue that effective top management responses to a
divisional crisis in a diversified company is hindered by commitment of senior managers and top
managements lack of knowledge with regard to local conditions. Hamermash list several top
management responses to divisional crisis; replacement of divisional and other personnel by
individuals who are good crisis managers, creation of new basic operating procedures to handle
future crisis, delay in acting until crisis gets severe enough to make top management intervention
justifiable in a company, lives by the philosophy of decentralization and participative management;
institution of an information system that provides top management information on the task
environment of the division; greater surveillance by top management of divisional management;
institution of more effective supervision by relocating of the unit facing crisis with the other units
that have similar tasks environments; obtaining a better balance by the top management between the
alternative stances of seeking committed subordinates and an unbiased evaluation of their
performance; seeking greater consistency between response to crisis and other activities, system and
values current in the organization. Hamermash seems to be suggesting more centralization, more
standardization more rationalization, more neutral evaluation of personnel and greater refinement in
the management information and control system as the primary responses to internal crisis that are
not well understood by top management.

Pearson and Clair (1998), in their attempt to define an organizational processes and crisis
management listed a variety of different types of crisis that an organization might face. (table 2.1).
Great variety of crisis that might affect an organization suggest to what extent organizations are
vulnerable to a crisis. Pearson and Claire added that in spite of the clear differences in crisis
situation, they share a number of elements. Pearson and Claire explained what all crisis generally
share. First crisis is believed to be an uncertain situation where cause-and-effect are unknown.
Second, crisis have a low probability of arising yet pose a great threat to an organization and to its
stakeholders. Third, when a disaster strikes an organisation, reaction times are very slow. Finally, a
situation can necessitate tough decisions with unpredictable consequences.

There are many different types of crises. For easier understanding of the difference between the
crisis, researchers create classification schemes. These schemes consist of several dimensions, Such
as internal, external, intentional, and unintentional. The internal-external dimension, as shown in
figure 2.3, refers to the location of the crisis. Internal means that the organization itself causes the
crisis and external means that someone or something outside the organization piloted the start of the
crisis. (Coombs, 1995). A faux pas occurs when an outside agent attempts to transform an
accidental activity into a problem. The beginning of a faux pas occurs when the organization acts
according to what they think is appropriate, and they have no intention to do wrong. Now, an
external agent claims that the organization engaged in unethical conduct. Here, the public needs to
make a decision about which opinion to accept. The public often shows their exasperation in the
forms of protest and boycotts. Situation requires little responsibility from the organization, because
of the external and unintentional nature of the problem. However, the organization is able to control
the situation by changing the questionable actions. That way the nature of the crisis lets the
organization deny external charges, and continue with their actions. (Coombs, 1995).

Accidents are internal and unintentional actions, that happened during normal operation of the
organization. Since events are unpredictable and frequently completely accidental, the company
bears no blame for the situation. Organizations often meet the public by giving an excuse about the
situation. This is a great strategy, since it strengthens the organizations lack of responsibility. The
term accident can be divided into two subcategories, acts of nature and human errors. Acts of nature
refers to incidents caused by nature, such as earthquakes tsunami’s, volcano eruption’s and
pandemics. Human errors are defined as product defects, industrial accidents and injuries at
workplace. The public seems to accept the nature accidents more than they accept the human
accidents. This is due to the fact that organization has little or no control over the acts of nature.
However the organizations should be ready to cope with the accidents in a healthy way, in order to
cause as little damage as possible. (Coombs, 1995)
Transgressions are situations created by organizations when they intentionally hide harmful
information from the public. Examples of transgressions are when organizations sell dangerous or
defective products, violate laws and withhold safety information from authorities. Organizations
have control over their actions, since the situations occur internally and intentionally. The only way
to deal with these crises is by adjustment, which does not dispute blame but instead works to atone
for the crisis in some way(Coombs, 1995).
Terrorism occurs when external actors take intentional action. The actions are intended to damage
the organization in different ways. Examples of terrorism is sabotage, workplace violence,
bombings and product mentoring. A good strategy for an organization to take on is the suffering
strategy which is based upon being a victim of an external active. (Coombs,1995).

Shiva Ramu (2000), brings out several issues which result in corporate crisis. Some of them are
employment related (such as sexual assault, employment abuse and security breaches); others
include the management of dangerous goods such as oil spills and others are related to the
market place, where companies face the age old issue of merchandise tampering and counterfeit
activities. New goods launched may include inherent risks, which may result in lawsuits and
harm to a company's image. When an organization works in many locations, it can face bribery
and terrorist threats not only at the office, but also at the homes of its employees.

2.2 Consequences of Crisis

Any crisis can lead to varying degrees of success or failure. No company will be
fully prepared to deal with all facets of a crisis. Table 2.2 lists the origins and effects of a
crisis as defined by Pearson and Clair (1998).

Organizations in crisis exhibit certain variations in corporate structures and

administration based on internal and external causes. Organizational crises have the
following impacts on management and organizational structure:
(1) Internal Communication Failure: During a crisis, the internal communication mechanism
can become stalled or lose quality. The root of this is a lack of information flow from
outside the organisation, which leads to a breakdown in internal contact. There may be
conflicts between policy makers, staff, and data miners in this case. To solve this issue,
centralized organization, communication, and organization are required
(Ozdevecioglu,2002).
(2) Centralized Authority: The most well-documented impact of threat on corporate structure is
an improvement in centralization (Dutton, 1986). During a crisis, there is an urgent need for
fast and precise decision making. In organizations, this personifies centralized power
(Dincer, 1992). Careless decision management will speed up decision making, but there
could be a pause if the company experiences outbursts. The most critical explanation for
centralized decision making is the corruption in the organization's usual decision making
mechanism. The most well-documented impact of threat on corporate structure is an
improvement in centralization (Dutton, 1986).
(3) Decreased Quality in Decision Process: The explanation for poor judgment quality is
concentrated and rapid decision making. During a crisis, crisis managers meet with advisors
from other agencies and organisations, but after a crisis, crisis managers only consult with
their supervisor or nearby managers. The key cause of poor quality decisions is a lack of
evidence or an inadequate flow of knowledge (Ozdevecioglu, 2002).
(4) Reduced Tendencies in Organisaitonal Change: Organizations will briefly go into standby
mode during a crisis due to confusion. This tendency stifles organizational entrepreneurship.
This condition may be current, but it is detrimental to the organisation. The concept of
transition during a crisis undoubtedly triggers issues in organisations (Ozdevecioglu, 2002).
(5) Inadequate Coordination: During a crisis, the need for teamwork grows. However, owing to
a lack of intelligence, there is insufficient communication between departments and staff.
Centralized leadership plays a part in this. Inadequate cooperation may result from a
breakdown in contact between agencies. (Ozdevecioglu, 2002)
(6) Confusion in Mission Authority and Responsibility: During a crisis, the most common
organizational and administrative process transition happens in personal representatives. The
main explanation for the reduction of staffing is a drop in production due to a drop in
demand. The corporation is forced to cut costs due to an increase in input rates and a poor
selling volume. Managers believe that the most valuable resource for making savings is
manpower. This saving necessitates the addition of a new mission for managers. This
condition creates more work for management while still harming personnel's psychological
well-being(Ozdevecioglu, 2002).
(7) The Rise of Fear and Panic among Personnel: Employment destruction is one of the
unintended effects of the recession. This often used form of crisis management may have a
negative impact on internal balances. Employees' fear of being laid off will cause panic and
negativity (Ozdevecioglu, 2002). Terroristic stress responses may trigger signs such as
evasion, attention issues, exhaustion, and feelings of insecurity and sorrow in the days and
weeks after a crisis. They will lead to drug abuse, psychiatric and physical disorders, and
marriage troubles in the long run. If these effects on employees are not recognized, they can
disrupt normal business operations and expose the organization to direct costs of
absenteeism, healthcare expenses, Workers' Compensation and litigation (Braverman,
2003).
(8) Corrupted Decision Making: During a crisis, the mind loop at both the corporate and human
levels decreases, problem-solving capability decreases, and decision-making process breaks
down. Dincer (1992). The main causes of this breakdown are instability and authoritarian
control.
(9) Demoralised Staff: A crisis situation can last for a long time or a short time. The staff's
morale suffers as a result of the stressful circumstances, time constraints, and panic that arise
during a crisis. A low degree of morale would have an effect on the corporate environment.
Person tensions may arise as a result of this situation, and reciprocal confidence among
employees may suffer as a result (Ozdevecioglu, 2002).
(10) Physiological and Psychological Depression: Psychological depression is one of the
detrimental consequences of the crisis process. And after the crisis has passed, employees
are unable to recover (Ozdevecioglu, 2002). Workers that are emotionally or mentally
affected by an event will be victimized as a result of a disaster, and employees' fundamental
 assumptions about themselves or the company may be shattered. Or the formation of the
assumption that one's personal system is under attack (Pearson and Claire, 1998).
(11) Increased Self Defence: during crisis, workers focused all their attention and
resources on crisis resolution, after the crisis future preparation and worries comes through.
This anxiety causes widespread concern among employees and will influence their decision
to remain with the company. As a result, the company could lose skilled personnel. Bennett
and his collaborators discovered that during a crisis, corporate devotion declines (Benneth,
Martin, Bies and Brockner, 1995).
(12) Corrupted Relations between Departments: During the recession, there was an
increase in managerial and operational issues. Departments such as publicity,
manufacturing, and public relations can be impacted. A lack of communication and
information, a tainted decision-making process, and poor-quality decisions will all have an
impact on the decisions and operations of all agencies. (Ozdevecioglu, 2002) Attempts to
include other divisions or units in an hour-long operational transition are thwarted by job
descriptions and turf wars. Those who practice office politics often thwart shifts in theory in
order to avoid alienating other main players (Summers and Nowicki, 2002)

2.3 Crisis Management Plan and Model

Reactive Crisis Management has a repressive personality. It highlights the crisis's initial stages
(Mitroff & Pearson & Harrington, 1996). Its structure does not allow for the early termination of
warning signs, resulting in the inability to prepare businesses for the upcoming crisis. The greatest
cost for the corporation as a result of the recession is the consequence. It plays a bearable part in
many organizations because it does not bind as many capital and manpower as preventive
management.
The study of crises investigates the presence of a danger to the social and political environment,
the emergence at random of a need for the state to react to the threat, the existence of a need for the
government to make decisions, the need for early decision making at a certain time, and the very
decision making of the state authorities (Day & Norris, 2006).

The Crisis Management Plan is an essential part of successful crisis management. A Crisis
Management Strategy involves the analysis of threats, risk evaluation, the implementation of the
plan, the rapid response, "recovery," and plan regulation (Mitroff & Aspalan, 2003). The Crisis
Management Plan should enhance the overall operation of the organization (Ramsay, 1999). The
prodromal crisis, immediate crisis, persistent crisis, and crisis resolution are the different stages of a
crisis (Fink,2002). These steps are followed during the crisis resolution process and are needed for
an effective resolution.

Combs disaster management is divided into three stages: 1) pre-crisis, 2) crisis case, and 3)
post-crisis (recovery).Before the crisis it is necessary to have a plan for crisis management and a
trained team for handling a crisis. The management strategy specifies what happens in a normal
crisis as well as the documentation and methods that will be used. Management team is very in
synthesis depending on the crisis. For the crisis, network communication and a website are needed.

According to Combs, the most critical process is the return of fame, which is accomplished by
effective techniques such as targeting the accuser, denial, the scapegoat tactic, excuse, reminding of
beneficial attributes of the organisation, accusation of goodwill, restitution, and apologies.
(Coombs, 2007).

According to Mitroff, the phases of a crisis and its management are as follows: pre-crisis
(detection of sings-forerunner of the crisis), prevention–preparation (research and risk factor
reduction), mention of the harm caused by the crisis, reconstruction of the crisis, and retrospection
of the crisis with information about the treatment of a pending crisis. The proper execution of crisis
management strategies is critical in order to accomplish efficient crisis management (Mitroff &
Pearson & Harrington, 1996).

According to Augustine, the five stages of crisis management are as follows: prevention of the
crisis, planning to handle the crisis, detection of the crisis (recognition of the crisis), restatement of
the crisis (containment of the crisis), and development of utilities from the crisis (resolving the
crisis). According to this belief, there is a heavy focus on disaster prevention (Augustine, 1995).

According to Olsen, crisis are handled in four stages: reduction, mitigation, recovery, and
restoration. The prevention process includes the removal of crisis situations in a system, making the
system resilient to different types of threats and malfunctions that could be triggered by a crisis by
risk analysis and threats for the detection and evaluation of risky factors. The preventive process
can result in device overhaul. The readiness process involves preparations for making changes,
informing and preparing for the handling of crisis situations, such as emergency planning. The
reaction process includes work done after a crisis to minimize its detrimental impact through
contact with the media. The retrieval process involves actions taken to repair what was lost or
damaged during the crisis (Olsen,2009).
 When a crisis happens, the planning for crisis treatment will make a difference. Businesses with
early warning systems and general preparation for disaster treatment are more likely to withstand a
crisis than those who are not properly trained (Faghfouri,2011). Coordination for crisis management
is critical for overall crisis management, particularly where states are involved, such as EU member
states (Olsen,2009). However a considerable portion of the experience and facts on trauma
treatment topics locked behind a protective curtain (Doeg,2005). Effective crisis treatment is
necessary to address the phenomena of re-crimination between individuals for the blame of those
accountable for the crisis (Mulgan,2002).

Several models have been developed to depict the crisis response process. Each model
identifies common actions that organizations take to address and respond to a crisis situation.
Pearson and Mitroff's (1993) model, which was later refined by Mitroff (2005), tends to be
symbolic in that it accommodates much of the earlier and more recent model articulations and
creates a feedback loop in which new information affects the entire framework.
During the signal detecting process, minor but important indicators that a problem is on the
horizon begin to emerge in an organizational environment. Failure of organisations to identify and
respond to the occurrence of early crisis signs often results in significant revenue, credibility, and
human life losses.
Crisis readiness involves systematic preparations to prepare an organisation to handle a
crisis case, including the allocation of essential staff, equipment, and actions during a crisis
situation. According to the findings of the Society for Human Resource Management (SHRM)
Disaster Preparedness (DP) Survey, more than 60% of participants listed planning, corporate
continuity strategies, and crisis coordination as components of their organizations' disaster
preparedness plans. In a separate study on crisis management readiness, 56 percent of respondents
recognized the position of crisis management teams in crisis planning. The American Management
Association (AMA) published a report in 2005. According to the survey findings, crisis
communications, crisis response teams, preparation, and PCPs are important components of crisis
planning. Each part is described in detail below:

Crisis Management Teams ( CMTs): These are defined as cross-functional and permanent groups of
people from all major facets of business who are in charge of crisis preparation and coordination
(Boin & Lagadec, 2000; Kash & Darling,1998; pearson &Mitroff,1993). CMT responsibilities
include recognizing and evaluating organizational crisis readiness, designing the mechanism and
resources required to recognize and resolve both planned and unexpected crisis situations, and
implementing recovery plans.
Crisis Communication: It is described as the process of addressing emerging crisis situations to
stakeholders, making decisions within the crisis management team, and supporting operational
decisions about knowledge exchanged with internal and external sources. (Hale,Duke &Hale,
2005).
Crisis training, drills and simulations: There are activities that improve disaster awareness and
preparedness in individuals, groups, and organizations (Shaw &Harrald,2004). The benefits of crisis
drills include testing the effectiveness of the crisis training strategy, providing formative and
summative assessments of training material for evaluation purposes, and ensuring a cohesive
response of emergency response services to the crisis situation (Peterson &Perry,1999). CPR/first
aid preparing, training an organization's specific action plans, skills for keeping everyone calm
during a crisis, fire prevention and evacuation, disaster control, techniques for handling dangerous
materials, and helping people with disabilities during a crisis are all part of the I'm in crisis
preparation during disaster (Fegley &Victor, 2005).
BCPs: There are written reports that explain how an organization's core activities can continue after
and during a crisis. Following Hurricane Katrina, the US Department of Homeland Security and the
Small Business Administration released recommendations to assist companies in developing
ongoing preparations such as contingency plans, remote storage for sensitive records, emergency
response lists, contact supplies, and alternate work sites (Continuity of Operations Planning, 2006).
BCPs are essential for ensuring that vital lifelines such as transportation and electricity are available
and affordable during a crisis.

The third phase of the crisis management model is stabilization, which entails minimizing
the effects of the crisis situation in order to avoid further escalation and casualties. Those actions
include engaging with internal and external partners about how the organisation is addressing the
crisis situation and how investment services are being protected, even if crisis communication
readiness can be handled during the preparatory stage of crisis management. Providing emergency
contact details with administration staff, retirees, and emergency partners to hear about
organizational and workforce relation matters is one of the specific coordination activities used to
contain a crisis. (Crisis Communication Report by Hewitt Associates, 2004)
During the rehabilitation process, companies continue to put processes in place to restore
routine business operations. Long-term and short-term corporate continuity plans, as well as
convincing customers that the company will resume normal operations, are also part of the
turnaround process. According to the SHRM emergency preparedness report, 63 percent of
organisations have BCPs, with organizations with more than 500 workers having the highest
concentration (80 percent) (Fegley & Victor,2005). The findings are backed by the disaster research
centre’s 5-year cross-sectional survey of 5000 private sector companies in the United States for
disaster preparedness and recovery. Webb et al. (2000) discovered that organisations tend to
concentrate on low-cost and simple preparedness activities, such as using first aid supplies, rather
than explaining recovery strategies. While BCPs have historically focused on the preservation of
information management processes for data backup after a crisis, the combined effect of the 9/11
terrorist attacks on businesses has prompted many organizations to incorporate new human relations
and organizational elements necessary for complete business recovery (Alonso, Boucher, & Colson,
2001; McKee & Gutheridge,2006).
The final two stages of the crisis management model concentrate on growing corporate
understanding and leveraging the expertise to rebuild the crisis structure in accordance with the
processes model. The final step will feed data into the whole system to encourage a cyclical and
iterative mechanism in which new knowledge is used to promote progress. This step entails careful
reflection on the crisis experience, review of the effect on core and ancillary Structure structures,
and finally adaptive behaviours and systems to enhance the organization's crisis management
activities. Mitroff (2005) advised organizations to engage in no-fault learning that is not claiming an
individual for the crisis event except in cases of criminal behaviour and liability, but rather use the
systematic factors to analyse the cost of the crisis event.

3. RESERCH QUESTION
The following research deals with the question “Analysing the plans and readiness for crisis

management of two manufacturing organization and comparing the two”

4. RESEARCH OBJECTIVES
The objectives of the following research are :
(1) To Study the Crisis Management Plans and Readiness of Boston Scientific.
(2) To Study the Crisis Management Plans and Readiness of Gao Tek.Inc.
(3) To Compare the crisis Management Plans and Readiness of the both organisations.
 5. RESEARCH METHODOLOGY

The methodology chapter will present by which means data will be collected for this study so that
the research question may be adequately answered and research purpose reached.

The purpose of the research was to study the Crisis Management Plans and Readiness of
Boston Scientific and Gao Tek.Inc. and compare the two in terms of their readiness and plaining
for managing a crisis. To answer the following research question a quantitative research was
carried out. Quantitative methods emphasize objective measurements and the statistical
mathematical, or numerical analysis of data collected through polls, questionnaire, and surveys, or
by manipulating pre-existence statistical data using computational techniques. Quantitative
research focuses on gathering numerical data and generalizing it across groups of people or to
explain particular phenomenon. To compare the crisis management plan of both the organization
a quantitative research was necessary. To find out the answer to the first objective a six question
survey was carried out on the employees of Boston Scientific. A total of 20 employees were given
the questionnaire through google forms and their response was then recorded. To achieve the
answer for the answer to the second question the same six question survey was carried out on the
employees of Gao Tek.inc. A total of 20 employees were given the questionnaire through google
forms and their responses were then recorded. The third objective of the research that deals with
the comparison of the crisis management plan and readiness of the two manufacturing
organizations was achieved by noting down the responses from the questionnaire of both the
originations in the forms of pie charts then comparing the responses of the both the questionnaire
for each question. Later a table was created of the compared responses to make the analysis easier.

The primary source of data collection was the questionnaire method. A questionnaire is a
research instrument that consists of a set of questioners or other types of prompts that aims to
collect information from the respondents. A research questionnaire is typically a mix of close
ended questions and open ended questions, in this case only close ended questions were used.
Open ended long form questions offer the respondent the ability to elaborate on their thoughts.
The data collected from a data collection questionnaire can be both qualitative as well as
quantitative in nature. A questionnaire may or may not be delivered in the form of a survey, but a
survey always consist of a questionnaire. The data was collected from the employees of each
organization from every department. It was collected specifically for this research. A Google form
link was sent to selected pool of sample through email. Their answer was then recorded in the
response form.
 The data collected form the questionnaire was then analyzed separately and then their
responses were compared. Later their responses were compared and similarities were written
down. Quantitative research just try to recognize and isolate specific variables contained within
the study framework, see correlation, relationships and causality and attempt to control the
environment in which the data is collected to avoid the risk of variables, other than the one being
studied, accounting for the relationships identified. The advantage of using a quantitative method
are:

- It allows for a broader study involving a greater number of subjects, and enhancing the
generalizing of the results.

- Allows for the greater objectivity and accuracy of results. Generally, quantitative methods
are designed to provide summaries of data that support generalizations about the
phenomenon under study.

- Applying well established standards means that the research can be replicated, and then
analyzed and compared with similar studies.

- You can summaries vast sources of information and make comparisons across categories
and over time.

- Personal bias can be avoided by keeping a ‘distance’ from participating subjects and using
accepted computational techniques.

Quantitative approaches assume an analytical approach to analyzing research questions, in

which evidence is regulated and measured, in order to resolve the accumulation of information and
to identify the causes of behavior. As a result, quantitative testing findings can be statistically
important but are often humanly negligible:

- Quantitative data is more effective and capable of testing theories, but it may overlook
qualitative information.

- Uses a static and rigid approach, resulting in an inflexible discovery process.

- The formulation of standard questions by researchers will result in "structural bias" and
false representation, in which the data directly represents the researcher's point of view
rather than the participating subject's.

- The results provide less information on behavior, behaviors, and motivation.

- The researcher can gather a much smaller and often simplistic dataset.

- The results are selective because they provide numerical explanations rather than complex
narratives and usually provide less elaborate accounts of human experience.
 6. DATA ANALYSIS

6.1 GAO TEK.INC RESPONSE CHARTS

How many crisis has your organisation experienced

within the last 5 years ?

5% None One
5%

35%

2 to 5 More than 5
30%

Don’t Know

25%

Does your organisation have an executive owner for

crisis? No owner designated

5% Owner but responsibilities not

defiend

35% Owner with defined

30% responsibilities

Owner with significant crisis

experience and authority to direct
enterprise-wide response
10% Owner who is viewed as an
20% industry leader driving crisis
readiness
Does your organisation have a crisis response plan?
We do not have a crisis
response plan
10%

25% We have a basic outline of

things to remember in incidents
20%
We have a plan, but it has not
been reviewed or updated in
over a year
We have a plan, review it
regularly and updated it within
15% the last year
30%
We have a plan, review and
test it regularly, and update
based on lessons learned

Does your organisation practice responding to a crisis?

5% No crisis simulations or exercises

Had at least one simulation in the past;

but no set schedule for them
30% 40%
Conduct a simulation at least annually
with at least one group within the
organisation
Conduct a simulation at least annually
with different groups covering various
scenarios
Defined simulation/training schedule,
10%
with relevant functions across topics;
15% lessons are incorporated
Following a crisis, how has your organisation incorporated
changes based on the root cause analysis of the crisis?

We have not performed a root

cause analysis
20%
We performed one; but did not
make any changes
40%
5% We performed one; and made a
few changes

We performed a root cause

analysis, developed a detailed
plan, and it is fully operational
25%
N/A - we have not had a crisis
10%

As a result of your most recent crisis, what was the impact on

your business (culture, operations, reputation, revenue, etc.)?

We are in a similar position to

17% where we were pre-crisis

Our organisation is in a better

5% place vs pre-crisis
48%

Our organisation is in a worse

place vs pre-crisis

30%
N/A - we have not had a crisis
6.2 BOSTON SCIENTIFIC RESPONSE CHARTS

How many crisis has your organisation experienced

within the last 5 years ?
0% None

One
20%
30%
2 to 5

More than 5

25% Don’t Know

25%

Does your organisation have an executive owner for

crisis?
No owner designated
10%

Owner but responsibilities not

10% 30% defiend

Owner with defined

responsibilities

20%
Owner with significant crisis
experience and authority to direct
enterprise-wide response
30% Owner who is viewed as an
industry leader driving crisis
readiness
Does your organisation have a crisis response plan?

We do not have a crisis

response plan
15%
20%
We have a basic outline of
things to remember in incidents

We have a plan, but it has not

been reviewed or updated in
15% over a year
We have a plan, review it
regularly and updated it within
40%
the last year
10% We have a plan, review and test
it regularly, and update based
on lessons learned

Does your organisation practice responding to a crisis?

No crisis simulations or
exercises
15%
Had at least one simulation in
the past; but no set schedule for
35% them
Conduct a simulation at least
20% annually with at least one group
within the organisation
Conduct a simulation at least
annually with different groups
covering various scenarios
5%
Defined simulation/training
25% schedule, with relevant
functions across topics; lessons
are incorporated
Following a crisis, how has your organisation incorporated
changes based on the root cause analysis of the crisis?

We have not performed a root

15% cause analysis

25%
We performed one; but did not
make any changes

We performed one; and made a

few changes
25%
We performed a root cause
analysis, developed a detailed
plan, and it is fully operational
25%
N/A - we have not had a crisis
10%

As a result of your most recent crisis, what was the impact on

your business (culture, operations, reputation, revenue, etc.)?

We are in a similar position to

where we were pre-crisis
25% 25%
Our organisation is in a better
place vs pre-crisis

0%
Our organisation is in a worse
place vs pre-crisis

N/A - we have not had a crisis

50%
 6.3 Boston Scientific

• Results from Boston Scientific show that only 25% employees feel that the organization
has experienced a crisis in the last 5 years and 30% feel that the organization has not
experienced any crisis in the past five years ( not including the period of covid)

• 30% of the employees feel that the organization has no executive owner for the crisis or it
has an owner but the responsibilities are not defined, 20% employees feel that the owner
has defined responsibilities. However only 10% employees feel that there is an owner with
significant crisis experience and authority to direct response and has an owner who is
viewed as an industry leader in crisis readiness.

• 40% of employees feel that they have a basic outline of things to remember in incidents,
20% of the employees feel they have a plan, review and test it regularly, and update based
on lessons learned, 15% of employees feel they do not have a crisis response plan and that
they have a plan, review it regularly and updated it within the last year.

• 30% of the employees feel that the organization does not practice any crisis simulation or
exercise, 25% feel that they had one simulation in the past, 20% of the employees feel that
they have conducted a simulation at least annually, only 15% feel that they have defined
simulation training schedule with relevant functions.

• 25% employees feel that they have not performed a root cause analysis, or that they have
performed one but it did not make any change, or that have performed an operational root
cause analysis. 15% feel that they have not had a crisis. 10 % feel that they have performed
an analysis but made few changes.

• 25% of the employees feel that the organization is in better place than before crisis, 25%
employees feel that either they are in a similar position as before or that they have not had
a crisis.
 6.4 GAO Tek.Inc

• Results from GAO Tek. Inc shows that 35% of employees don’t know whether they have
faced a crisis or not. 30% of the employees feel that they have faced at least one crisis. 25%
of the employees feel that they have face between 2-5 employees in the last 5 years (not
Including Covid).

• 35% employees feel that there is no executive owner for crisis. 30% of employees feel that
there is an Owner with significant crisis experience and authority. 20% of the employees
feel that there is an Owner with defined responsibilities. And only 10% feel that there is an
Owner but responsibilities not defined

• 30% feel that they have basic outline of things to remember. 25% feel that they do not have
a response plan. 20% that they have a plan and review it regularly. 15% feel that they have
a plan but it is not reviewed.

• 40% feel that there is no crisis stimulation or exercise. 30% feel that the organization
conducts a stimulation at least once a year. 15% feel that they had had at least one
stimulation in the past. Only 10% feel that they conducted a stimulation annually with at
least one group in the organization.

• 40% feel that they have not performed a root cause analysis for the crisis. 25% feel that
they have performed one and made few changes 20% feel that they have not had a crisis.
Only 10% feel that they have performed one root cause analysis but did not make any
change.

• 47.8% feel that they are in the similar position as before the crisis. 30.4% feel that the
organization is in a better place than before the crisis. 17.4% feel that they have not had a
crisis.
7. FINDINGS AND CONCLUSIONS

The research was conducted to answer the question “Analyzing the plans and readiness for
crisis management of two manufacturing organization and comparing the two”. A crisis is a
high consequence low probability action that strikes an organisation, and has the potential
power to threaten the entire business. It endangers the general public sense of values, safety
and correctness. The protection of an organisation’s reputation from damage is achieved
through the implementation of crisis response strategies. Crisis can be of many types. Some
may come as a surprise to management, whereas others are part of the standard risks of
business operations .Many experts have carried out studies on the different kinds of crisis.
Smith (1963) has represented seven different kinds of crisis some external, some internal. .
Any crisis can lead to varying degrees of success or failure. No company will be fully prepared
to deal with all facets of a crisis. The Crisis Management Plan is an essential part of successful
crisis management. A Crisis Management Strategy involves the analysis of threats, risk
evaluation, the implementation of the plan, the rapid response, "recovery," and plan regulation
(Mitroff & Aspalan, 2003). The Crisis Management Plan should enhance the overall operation
of the organization (Ramsay, 1999).

The results after analyzing the plans and readiness of the two organizations indicate that
all the employees in the organizations are not aware of, whether the organization has a crisis
plan or model o if they have faced a crisis in the past five years or not.

Boston Scientific: Most of the employees feel that they have not faced a crisis, and that
they have no executive owner for the crisis or it has an owner but the responsibilities are not
defined. However, many of them also believe that they have a basic outline of things to
remember in incidents but the organization does not practice any crisis simulation or exercise,
many also believe they have not performed a root cause analysis, or that they did perform but
did not bring any change. Many also believe that the organization is in a better position than
before the crisis

GAO TEK: Most employees don’t know if they have faced a crisis or not, however many
feels that have faced at least one. Many also believe that there is no executive owner but an
outline plan is there about the incidents. Most of them feel that they have not performed a root
cause analysis and that there is no crisis stimulation no exercise. Most of them however feel
that they are in the same position as before the crisis.

The results indicate that both the organizations are either not aware of the crisis management
plan or that they do not have a sufficient preparedness to deal with the crisis.
8. SUGGESTIONS AND RECOMENDATION

After analyzing the results of the survey it can be concluded that both the originations
should make sure that they have at least one contingency outline ready for crisis situation, they
should have a designated crisis executive and the outline plan should be conveyed to all the
departments so that they are well aware of how to deal with them or to prepare themselves in
advance if possible.
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 APPENDIX

TABLE 2.1: Organizational Crisis

AN ARRAY OF ORGANIZATIOANL CRISIS

Extortion Bribery

Hostile Takeovers Information Sabotage

Product Tampering Workplace bombing

Vehicular Fatality Terrorist attack

Copyright Infringement Plant Explosion

Environmental spill Sexual Harassment

Computer Tampering Escape of hazardous materials

Security Breach Personnel assault

Executive Kidnapping Assault od customers

Product/ Service boycott Product recall

Work-related Homicide Counterfeiting

Malicious Rumour Natural disaster that destroys

corporate headquarters

Natural Disaster that disrupts a major Natural disaster that eliminates key
product or service stakeholders

Natural disaster that destroys

organisational information base

Source: Adapted from Pearson & Clair, 1998, p.60

Table 2.2 Crisis Management Success and Failure

Crisis Failure Midground Success

Concern Outcomes Outcomes

Signal Ignored and Becomes Detected early

Detection alert and
caught appropriate
unaware responses.

Incident Beyond Slight Impact

boundaries of damage to contained
Containment those beyond within and no
Organisation organisation stakeholder
boundaries injury

Business Operation Affected Business as

operation usual no loss
Resumption shutdown closed of product or
downtime is temporarily service
lost Downtime delivery.
minimum

Effects on No learning Learning Changes in

occurs policies and
Learning similar crisis procedure,
recur lessons
applied to
future
incidents.

Effects on Negative Negative Image

repercussions, effect short- improves,
lived public public
perceives perceives
 Reputation Public errors as organisation
perceives minor as caring
organisation
as a villain

Resource Lack essential Scrappes by Own and

on own External
Availability Resources and ad hoc resources
assistance available for
response

Decision- Slow, fantasy Slow, due to Timely

Making driven extra decision and
organisational based on
constraints. facts

Source: Pearson & Clair (1998), p.68 (The above table is a condensed version of the
original).